Less than 24 hours after The Eagle Online commenced operations, hackers struck. They completely brought down the site. An analysis of the site by our builders traced it to one major story: The fraud Nigerians are subsidizing – Wikileaks. On the opening day, over 10,000 unique visitors were on the site. The interest of the majority was to view the aforementioned article. And it was from the page of that article that the hackers struck, first making it unreadable and then paralyzing the site.
The article was a cable of the United States Embassy on a meeting the Chairman of Zenon Petroleum and Gas and African Petroleum, Femi Otedola, had with an official of the Embassy. In that leak, Otedola, one of the biggest beneficiaries of the subsidy funds through Zenon Petroleum and Gas, made allegations that also, overtly and covertly, roped him into the sleaze in the oil industry in Nigeria. Otedola, described in the leak as the largest supplier of diesel fuel in Nigeria, said that there was a lot of fraud in the oil industry in Nigeria.
The conversation, in the main, especially in this season of mass action over the decision of government to foist more hardship on Nigerians instead of going after those who are taking undue advantage of our commonwealth, is to further draw attention to the sleaze in the oil industry, with the various partakers in the sleaze using every available opportunity to play the blame game on their fellow opportunists. More of such news, opinions and articles are coming.
But thank God the site is back. And better. The purposes of this site include providing you with news as they break and news you will not get to read elsewhere. It is intended to help build a Nigeria of the dream of those with the love of the country at heart and not that of opportunists.
Reproduced below is the “offending” article, which motive and source some people initially doubted while majority saw the real reason for the publication:
The fraud Nigerians are subsidising – Wikileaks
Reproduced below is a secret cable of the United States Government on the fraud in the oil sector in Nigeria as published by Wikileaks.
C O N F I D E N T I A L SECTION 01 OF 02 LAGOS 000767
SIPDIS
NOFORN
E.O. 12958: DECL: 04/07/2014
TAGS: EPET EINV EFIN PGOV NI
SUBJECT: SCANDAL BREWING OVER NIGERIAN FUEL IMPORTS
Classified By: J. GREGOIRE FOR REASONS 1.5 (B), (D), AND (E).
¶1. (C) SUMMARY. A scandal is brewing in Nigeria over prices paid by the government for imported fuel. International fuel traders have been falsifying the dates of bills of lading to reflect particularly high market prices, overcharging the Nigerian National Petroleum Corporation (NNPC) by $300 million or more. END SUMMARY.
¶2. (C N/F) On April 2, Chris Finlayson, Chairman and Managing Director of Shell Petroleum Development Corporation of Nigeria (SPDC), told Consul General and Econoff that a scandal is brewing within the NNPC over payments made to international fuel marketers. Finlayson said some marketers have been changing the dates when fuel shipments bound for Nigeria were loaded in order to take advantage of particularly high market prices. He said the total overpayment by NNPC may be as high as $330 million. Finlayson noted that Shell is not one of the marketers in question, but is becoming a leading fuel supplier for NNPC.
¶3. (C N/F) On April 6, Femi Otedola, President and CEO of Zenon Petroleum and Gas, the largest supplier of diesel fuel in Nigeria, essentially corroborated Finlayson’s report. Otedola said over $300 million has been overpaid by NNPC for fuel imports, and that many leading international traders are involved. According to Otedola, NNPC contracts to pay its suppliers the market price on the day a ship is loaded with fuel. He said NNPC recently discovered, however, that bills of lading were altered to reflect loading on days of high market prices. Discrepancies were found when comparing dates on the bills of lading with dates of landing in Lagos.
¶4. (C N/F) Pointing to examples, Otedola said that while a tanker loading fuel at a refinery in Bahrain usually takes four weeks to arrive in Lagos, comparisons between the bills of lading and dates of arrival of some shipments reflected only a four-day difference, and in other cases, if taken at face value, indicated the journey took nine months. Otedola said 73 shipments from refineries in the Persian Gulf, England, and Venezuela listed delivery times of only one day. NNPC is attempting to get compensation for the over-charge. Otedola went on that most of the fuel traders supplying Nigeria are implicated in over-charging NNPC, and showed a list of 17 companies that supplied fuel in the first quarter of 2004, several of which, he said, are significant players in international markets, such as Trafigura and Vitol. Otedola added that three companies clearly not involved in the scandal are British Petroleum, ChevronTexaco and Shell.
¶5. (C N/F) Otedola recommended that NNPC stop contracting with international fuel traders and negotiate purchases directly from refineries worldwide. According to him, such a move would have two positive effects. Otedola calculates that NNPC would save some four billion dollars a year in expenditures on imported fuel. (Note: Prior to deregulation in October 2003, NNPC, then the sole importer of fuel, lost two billion dollars per year because it sold stock to retailers below purchase price. After October 2003, NNPC initially stopped subsidizing fuel sales, letting marketers import fuel to be sold at market prices. However, sources agree that NNPC is back in the business of subsidizing gasoline sales while it maintains a facade of deregulation by encouraging private marketers to import fuel that NNPC purchases at market price. NNPC then sells the fuel to marketers and retailers at a reduced price to ensure that those companies maintain a profit margin while holding consumer prices to informal caps set by the Department of Petroleum Resources. End Note.)
¶6. (C N/F) Otedola added that by cutting out the international traders, NNPC would also enhance the environment in which Nigeria’s refineries could be restored and operated. Otedola said he believes international fuel trade “mafias” are behind the failure to bring Nigeria’s refineries back on-line and to capacity. Otedola is convinced these traders arrange for the vandalization of crude oil feeder pipelines, which keep the refineries at Port Harcourt, Warri and Kaduna closed or under-capacity. He said the international traders generally receive at least one million dollars per shipload of fuel to Nigeria and have grown accustomed to the easy money Nigeria offers as long its refineries remain down.
¶7. (C N/F) As an example, Otedola described an arrangement the National Electric Power Authority (NEPA) had with Sahara Energy for the provision of diesel to an emergency power generation plant in Abuja. He said that while a pipeline was under construction to deliver fuel to the main power plant, NEPA paid some five billion dollars to Sahara over four years for diesel to the back-up plant. It was later discovered that NEPA had received only about one billion dollars worth of fuel, according to Otedola. Otedola said that he, too, was contracted to deliver diesel fuel to the plant on occasion; however, he petitioned the president to investigate the matter after becoming suspicious of NEPA’s ongoing contract with Sahara and the fact that the pipeline for the power plant was never finished. He said his intervention led to an investigation that ultimately resulted in the cancellation of NEPA’s contract with Sahara.
¶8. (C N/F) COMMENT: The allegation that international traders bilked NNPC of hundreds of millions of dollars is yet another example of the poor management of Nigeria’s energy sector, and highlights the complex links between crude sales, fuel importation, refinery maintenance, and energy production here. Otedola is probably right in suggesting that long-standing sweetheart deals between the NNPC and a variety of fuel traders is keeping the system inefficient. That may also explain why the GON just can’t seem to get its refineries running even after spending a billion dollars or more on maintenance contracts over the last four years. Otedola said he initially bid to purchase the Port Harcourt refinery offered for privatization, but he recently told President Obasanjo he will not invest in the refinery so long as NNPC purchases fuel from traders instead of negotiating directly with refineries in other countries and leasing ships itself to deliver fuel to Nigeria. It is not clear if Otedola’s assumption that the international traders’ stake in Nigeria’s current fuel market is the main driver behind the country’s refinery woes. But it is clear that the fundamentals of infrastructure security, interim supply stability, and transactional transparency must still be addressed if the GON is to be taken seriously about its efforts to deregulate and largely privatize Nigeria’s downstream petroleum sector. END COMMENT. HINSON-JONES.
